Stock Market Basic Glossary

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15 Stock Trading Terms You Must Know - Part 1

11 Jan 2016 | 16:00PM

Whether you are a beginner at investing or seasoned investor being familiar the basic term of the stock market is essential. Expanding your stock market vocabulary will enable you to be a better investor, so that you can trade successfully. Given below is a basic glossary of terms that you must know as an investor:-

Agent:

In the stock market, an agent refers to a brokerage firm which buys or sells shares on behalf of the investor.

Ask/Offer:

Lowest price at which an owner agrees to sell the shares.

Assets:

Assets refers to the property owned by the company such as cash, equipment, land, technology etc.

Bear Market:

It is a market situation where the stock prices fall consistently.

At the money:

A situation at where the options strike price is same as the price of the underlying securities.

Beta:

It is a measurement of relationship between stock price of any particular stock and the movement of whole market.

Bid:

The highest price that a buyer is willing to pay for a particular stock.

Blue Chip Stock:

Stock of well-established and financially sound companies that have a market capitalization in thousands of crores.

Board Lot:

A standard trading unit which is defined by a particular exchange board. The Board lot size depends on the per share price. Some common board lot sizes are 50, 100, 500, 1000 units.

Bonds:

It is promissory note issued by the government or a company to its buyers. It illustrates the specified amount held for a specified time period by the buyer.

Book:

It is an electronic record that is used to manage all the pending buy and sell orders of particular stocks.

Bull Market:

A market situation where the price of the stocks increases rapidly.

Call Option:

It is an option given to investor the right to buy a particular stock at a specified price and time which is not an obligation.

Close Price:

The final price at which the stock is sold or traded on a particular trading day.

Convertible Securities:

A security (bonds, debentures, preferred stocks) by an issuer that can be converted into other securities of that issuer are known as convertible securities.

Debentures:

A form of debt instrument which is not secured by physical assets or collateral.

Defensive Stock:

A type of stock that provides a constant rate of dividends even in the periods of economic downturn.

Delta:

The ratio that compares the change in the price of the underlying asset to the corresponding change in the price of a derivative.

Face value:

It is the cash value or the amount of money the holder of a security is going to earn from the issuer of the security at the time of maturity.

One-sided Market:

A market that only has potential sellers or only potential buyers but not both.

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